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The National Academies

NCHRP 19-24 [RFP]

A Guide for Implementing Price Adjustment Clauses to Balance Risk Sharing in Construction Projects

Posted Date: 1/17/2024

  Project Data
Funds: $450,000
Contract Time: 30 months
(includes 1 month for NCHRP review and approval of the interim report and 3 months for NCHRP review and contractor revision of the final report)
Authorization to Begin Work: 7/22/2024 -- estimated
Staff Responsibility: Mike Brooks
   Phone: 202.334.2863
   Email: MBrooks@nas.edu
RFP Close Date: 3/4/2024
Fiscal Year: 2024

BACKGROUND

Prices of highway construction materials have fluctuated considerably since the start of the COVID-19 pandemic. This trend, previously observed with petroleum-intensive materials such as asphalt concrete, has extended to other materials such as steel and Portland cement. Consequently, construction contractors have elevated their project bids as a risk-mitigation strategy. These elevated costs hamper the ability of state departments of transportation (DOTs) to deliver on their programmatic objectives in a timely and cost-conscious manner.

One strategy to mitigate this uncertainty is the use of price adjustment clauses in highway construction contracting. Contractual thresholds triggered by rising or falling material prices lead to adjustments in contractor payments. When administered properly, price adjustment clauses can lead to more equitable highway construction contracting practices.

Price adjustment clauses are not applied consistently by state DOTs. Research is needed to determine the state of the practice of price adjustment clause administration, assess the availability of pertinent tools and resources, develop strategies to effectively administer price adjustment contracting practices, and suggest enhancements and refinements to current practices.

OBJECTIVE

The objective of this research is to develop a guide to help state DOTs craft or update material price adjustment clauses for highway construction contracting. At a minimum, the guide should identify appropriate resources and material price indices, offer effective practices for managing contractual risk stemming from price fluctuation throughout the project lifecycle, identify opportunities for further refinement of the practice, and be accompanied by decision support tools and resources.

TASKS

NCHRP is seeking the insights of proposers on how best to achieve the research objective. Proposers are expected to describe research plans that can realistically be accomplished within the constraints of available funds and contract time. Proposals must present the proposers' current thinking in sufficient detail to demonstrate their understanding of the issues and the soundness of their approach to meeting the research objective. 

PHASE I: Planning and Initial Outreach

Task 1. Conduct a review of relevant price adjustment literature and resources. 

Task 2. Design a survey of state DOTs and the construction contracting industry. The survey should include current practices, knowledge gaps, and areas of concern. Submit a technical memorandum summarizing Tasks 1–2 for NCHRP approval. Approval is required before work on subsequent tasks may begin. 

Task 3. Conduct a survey of state DOTs and construction contracting professionals. As needed, conduct targeted interviews of subject-matter experts to determine user needs.

Task 4. Propose a method to achieve the research objective, to be fully developed in Phase II. At a minimum: 

  • Provide an overview of quantitative inputs, such as cost-to-work ratios/fuel usage factors
  • Provide user guidelines for finding and choosing a correct index
  • Discuss effective practices for specification development
  • Provide an inventory of existing practices, including material price indices, model bid specifications, and case studies
  • Provide suggestions for decision support resources to accompany the guide
  • Discuss opportunities for further development of practice, including considerations for new material price indices
  • Discuss the need for further outreach
  • Provide an annotated outline for the proposed guide
  • Describe the data to be collected for the decision support resources and the guide's intended users

Task 5. Prepare an interim report that documents Tasks 1–4 and provides an updated work plan for the remainder of the research. The updated plan must describe the process and rationale for the work proposed for Phase II.

Note: Following a 1-month review of the interim report by NCHRP, the research team will be required to meet with the NCHRP project panel to discuss the interim report. Work on Phase II will not begin until authorized by NCHRP.

For budgeting purposes, the proposer shall plan on having one in-person panel meeting in Washington, DC. Costs for the meeting venue and travel costs for NCHRP panel members to attend the meeting will be paid separately by NCHRP.

PHASE II: Execute the Method and Produce Final Deliverables

Task 6. Execute the research method from Task 4 according to the approved interim report.

Task 7. Develop the guide and decision support tools. Revise based on panel and practitioner feedback. The draft guide and decision support tools shall be submitted no later than 6 months before the contract end date.

Task 8. Prepare the final deliverables, which shall include:

  • A conduct of research report that documents the entire research effort
  • The guide and decision support tools
  • An executive memorandum summarizing key findings, providing suggestions for effective practice refinement, and discussing considerations for developing future material price indices
  • Public outreach materials, including a PowerPoint presentation with speaker notes
  • A standalone technical memorandum entitled “Implementation of Research Findings and Products” (see Special Note J for additional information).

Note: Following receipt of the draft final deliverables, the remaining 3 months shall be for NCHRP review and comment and for research agency submittal of the final deliverables.

SPECIAL NOTES

A. The Information and Instructions for Preparing Proposals for the Transportation Research Board’s Cooperative Research Programs were revised in May 2023. Please take note of the new and revised text which is highlighted in yellow.

B. Proposals must be submitted as a single PDF file with a maximum file size of 10 MB. The PDF must be formatted for standard 8 ½” X 11” paper, and the entire proposal must not exceed 60 pages (according to the page count displayed in the PDF). Proposals that do not meet these requirements will be rejected. For other requirements, refer to chapter V of the instructions.

C. The Information and Instructions for Preparing Proposals for the Transportation Research Board’s Cooperative Research Programs have been modified to include a revised policy and instructions for disclosing Investigator Conflict of Interest. For more information, refer to chapter IV of the instructions. A detailed definition and examples can be found in the CRP Conflict of Interest Policy for Contractors. The proposer recommended by the project panel will be required to submit an Investigator Conflict of Interest and Disclosure Form as a prerequisite for contract negotiations.

D. Proposals will be rejected if any of the proposed research team members work for organizations represented on the project panel. The panel roster for this project can be found at https://www.mytrb.org/OnlineDirectory/Committee/Details/6939. Proposers may not contact panel members directly; this roster is provided solely for the purpose of avoiding potential conflicts of interest.

E. Proprietary Products - If any proprietary products are to be used or tested in the project, please refer to Item 6 in the Information and Instructions for Preparing Proposals.

F. Proposals are evaluated by the NCHRP staff and project panels consisting of individuals collectively knowledgeable in the problem area. The project panel will recommend their first choice proposal considering the following factors: (1) the proposer's demonstrated understanding of the problem; (2) the merit of the proposed research approach and experiment design; (3) the experience, qualifications, and objectivity of the research team in the same or closely related problem area; (4) the plan for ensuring application of results; (5) how the proposer approaches inclusion and diversity in the composition of their team and research approach, including participation by certified Disadvantaged Business Enterprises; and, if relevant, (6) the adequacy of the facilities. A recommendation by the project panel is not a guarantee of a contract. The National Academy of Sciences (NAS - the contracting authority for the National Academies of Sciences, Engineering, and Medicine) will conduct an internal due diligence review and risk assessment of the panel’s recommended proposal before contract negotiations continue.

Note: The proposer's approach to inclusion and diversity as well as participation by Disadvantaged Business Enterprises should be incorporated in Item 11 of the proposal.

G. Copyrights - All data, written materials, computer software, graphic and photographic images, and other information prepared under the contract and the copyrights therein shall be owned by the National Academy of Sciences. The contractor and subcontractors will be able to publish this material for non-commercial purposes, for internal use, or to further academic research or studies with permission from TRB Cooperative Research Programs. The contractor and subcontractors will not be allowed to sell the project material without prior approval by the National Academy of Sciences. By signing a contract with the National Academy of Sciences, contractors accept legal responsibility for any copyright infringement that may exist in work done for TRB. Contractors are therefore responsible for obtaining all necessary permissions for use of copyrighted material in TRB's Cooperative Research Programs publications. For guidance on TRB's policies on using copyrighted material please consult Section 5.4, "Use of Copyrighted Material," in the Procedural Manual for Contractors.

H. The text of the final deliverable is expected to be publication-ready when it is submitted. It is strongly recommended that the research team include the expertise of a technical editor as early in the project timeline as possible. See Appendix F of the Procedural Manual for Contractors Conducting Research in the Transportation Research Board’s Cooperative Research Program for technical editing standards expected in final deliverables.

I. Proposals should include a task-by-task breakdown of labor hours for each staff member as shown in Figure 4 in the Information and Instructions for Preparing Proposals. Proposals also should include a breakdown of all costs (e.g., wages, indirect costs, travel, materials, and total) for each task using Figures 5 and 6 in the brochure. Please note that TRB Cooperative Research Program subawards (selected proposers are considered subawards to the National Academy of Sciences, the parent organization of TRB) must comply with 2 CFR 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. These requirements include a provision that proposers without a "federally" Negotiated Indirect Costs Rate Agreement (NICRA) shall be subject to a maximum allowable indirect rate of 10% of Modified Total Direct Costs. Modified Total Direct Costs include all salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $25,000 of each lower tier subaward and subcontract. Modified Total Direct Costs exclude equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs and the portion of each lower tier subaward and subcontract in excess of $25,000.

J. The required technical memorandum titled “Implementation of Research Findings and Products” should (a) provide recommendations on how to best put the research findings/products into practice; (b) identify possible institutions that might take leadership in applying the research findings/products; (c) identify issues affecting potential implementation of the findings/products and recommend possible actions to address these issues; and (d) recommend methods of identifying and measuring the impacts associated with implementation of the findings/products. Implementation of these recommendations is not part of the research project and, if warranted, details of these actions will be developed and implemented in future efforts.

The research team will be expected to provide input to an implementation team consisting of panel members, AASHTO committee members, the NCHRP Implementation Coordinator, and others in order to meet the goals of NCHRP Active Implementation: Moving Research into Practice, available at http://onlinepubs.trb.org/onlinepubs/nchrp/docs/NCHRP_ActiveImplementation.pdf

K. If the team proposes a Principal Investigator who is not an employee of the Prime Contractor, or if the Prime Contractor is proposed to conduct less than 50% of the total effort (by time or budget), then section five of the proposal should include: (1) a justification of why this approach is appropriate, and (2) a description of how the Prime Contractor will ensure adequate communication and coordination with their Subcontractors throughout the project.

L. All budget information should be suitable for printing on 8½″ x 11″ paper. If a budget page cannot fit on a single 8½″ x 11″ page, it should be split over multiple pages. Proposers must use the Excel templates provided in the Information and Instructions for Preparing Proposals for the Transportation Research Board’s Cooperative Research Programs.


Proposals must be uploaded via this link: https://www.dropbox.com/request/6A30AuspqG9RUUXo4Wdw 
Proposals are due not later than 5:00 p.m. Eastern Time on 3/4/2024.

This is a firm deadline, and extensions are not granted. In order to be considered for award, the agency's proposal accompanied by the executed, unmodified Liability Statement must be in our offices not later than the deadline shown, or the proposal will be rejected.

Liability Statement

The signature of an authorized representative of the proposing agency is required on the unaltered statement in order for TRB to accept the agency's proposal for consideration. Proposals submitted without this executed and unaltered statement by the proposal deadline will be summarily rejected. An executed, unaltered statement indicates the agency's intent and ability to execute a contract that includes the provisions in the statement.

Here is a fillable PDF version of the Liability Statement. A free copy of the Adobe Acrobat PDF reader is available at https://www.adobe.com.


General Notes

1. According to the provisions of Title 49, Code of Federal Regulations, Part 21, which relates to nondiscrimination in federally assisted programs, all parties are hereby notified that the contract entered into pursuant to this announcement will be awarded without discrimination on the grounds of race, color, religion, sex, national origin, or disability.

2. The essential features required in a proposal for research are detailed in the current brochure entitled "Information and Instructions for Preparing Proposals". Proposals must be prepared according to this document, and attention is directed specifically to Section IV for mandatory requirements. Proposals that do not conform with these requirements will be rejected.

3. The total funds available are made known in the project statement, and line items of the budget are examined to determine the reasonableness of the allocation of funds to the various tasks. If the proposed total cost exceeds the funds available, the proposal is rejected.

4. All proposals become the property of the Transportation Research Board. Final disposition will be made according to the policies thereof, including the right to reject all proposals.

5. Potential proposers should understand that follow-on activities for this project may be carried out through either a contract amendment modifying the scope of work with additional time and funds, or through a new contract (via sole source, full, or restrictive competition).


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